KARACHI: The International Finance Corporation (IFC) has launched a Rs33.6 billion ($120 million) fund to support financing from a foreign bank’s Pakistani subsidiary to a local fertilizer manufacturer to strengthen the country’s agri-value chain and support farmers, IFC said on Tuesday.

The funding will support long-term Pakistani rupee-denominated financing from Standard Chartered Bank Pakistan (SCBP) Limited to Engro Fertilizers Limited to strengthen Pakistan’s agri-value chain by mobilizing local capital, according to IFC.

It will help Engro Fertilizers make capital investments in maintenance of facilities and turnarounds, enabling uninterrupted supply of urea and other fertilizers to meet national demand as well as support farmer programs to complement its core mission of reliable production.

Ashruf Megahed, the IFC regional industry head for the Middle East and Central Asia, said the project will create new avenues for long-term local currency financing, supporting growth and enhancing financial resilience to manage risk in a sector critical to the nation’s economy.

“This investment reflects the strength of our partnership with Engro Fertilizers and Standard Chartered Bank and our shared commitment to provide innovative solutions to address challenges in a sustainable manner,” IFC quoted him as saying.

The investment, aimed at strengthening Pakistan’s agriculture sector and food security, is supported by a first-loss counter guarantee from the IFC-Canada Facility for Resilient Food Systems, according to the global finance corporation. It marks IFC’s first local currency investment in Pakistan.

“Engro has always strived to solve Pakistan’s most pressing issues meaningfully. Using local capital to strengthen local value chains reflects our commitment to the country and to our farmers — the backbone of Pakistan’s economy — through reliable fertilizer production,” Engro Fertilizers CEO Ali Rathore said.

“We are grateful to our partners, IFC and Standard Chartered Bank, for enabling us to advance this mission.”

Agriculture accounts for 24 percent of Pakistan’s gross domestic product (GDP) and 40 percent of employment, according to IFC. The investment will help address challenges such as inefficient supply chains, underfunded farmer programs, low literacy and rising input costs.

“At Standard Chartered, we are committed to financing solutions that enable sustainable growth and long-term resilience across Pakistan’s economy,” said SCB CEO Rehan Shaikh.

“This partnership with IFC and Engro Fertilizers reflects our shared vision of strengthening food security and supporting one of the country’s most critical value chains.”